Penalties for Breaching a Real Estate Contract

A real estate contract is governed by the legal system and failure to execute a signed agreement can result in legal action due to breach. Breach of contract can lead to penalties including fines and an order to perform in some circumstances.

Real Estate Contract Terms

Breach can include failure to abide any of the terms of your signed, written real estate contract. The following terms are generally laid out in a real estate contract:

• Price to be paid and a description of the property, including location and size are generally included.
• The date the sale will close and any move in date for residential properties should be indicated.
• Any items on the property that will be removed or that are included in the purchase price should be disclosed.
• A term guaranteeing that the seller will provide clear title should be included.
• Other terms as the parties agree.

Of course, there are sometimes legitimate, legal grounds for not executing a real estate contract. If you have such grounds, they provide a defense in case of legal action regarding your case.

Not all real estate contracts result in an actual sale. There is a time period during which any uncertainty can be resolved, and during this time, there are many legitimate reasons why one or both parties has a legal right to get out of the contract. Some legitimate reasons why parties are allowed to abandon an otherwise legitimate real estate contract include:

• Unexpected issues that arise during property inspections such as sewage issues or insect infestations.
• A purchaser is unable to secure a loan to purchase the property.
• Undisclosed facts which make the deal disproportionate.

It is not enough for a party to just change his mind after he has signed on the dotted line. If there is no legitimate reason for not proceeding with the sale or purchase, you may have the right to a legal remedy which may include compensatory damages (any costs spent or the cost of lost opportunities) and other remedies.

Getting Legal Assistance

If you are dealing with a real estate contract dispute, an attorney who handles real estate law and contracts cases can help you get what you deserve. In many real estate cases, specific performance of the contract can be ordered due to the unique quality of land. A lawyer can advise you of the potential for specific performance and other remedies in your real estate contract case.